Glossary

Average revenue earned per unit of output; normally based on total passenger-kilometres or tonne-kilometres sold, but they can also be calculated per unit of traffic volume, e.g. per passenger carried or per kilometre flown.

The time from the moment an aircraft leaves its parking position ("off-blocks time") to taxi to the runway for take-off until it comes to a complete standstill at its final parking position at the destination airport ("on blocks").

The right to purchase a specific underlying security within a specified period of time at an agreed price.

Measure of a company´s financial and earnings potential. It is calculated as the difference between the inflow and outflow of cash and cash equivalents generated from ongoing business activities during the financial year.

A code-share is a flight segment that is sold under the flight number of one airline, while being operated either partly or entirely by another airline. Both companies maintain their own independent profile on the market.

Institutionalised arrangements for ensuring that a company´s management and staff duly comply with all statutory provisions and prohibitions.

A financial indicator. It represents the ratio of adjusted cash flow from operating activities to net indebtedness and pensions. The rating agencies´ comparable criteria for an investment grade rating are met if a target of at least 60 per cent is achieved sustainably.

A balance sheet item used to show taxable and deductible temporary differences. Deferred taxes reflect the temporary differences between assets and liabilities recognised for financial reporting purposes and such amounts recognised for income tax purposes.

Transactions by members of a company´s supervisory, executive or divisional boards, or their family members, involving shares in "their" company. Under German law, any such dealings must be disclosed if they exceed EUR 5,000 within a calendar year.

Indicator for assessing the profitability of an investment in shares. It is determined by dividing the dividend by the share price at the close of the reporting year and then multiplying it by 100.

Financial indicator denoting earnings before interest and taxes.

Financial indicator denoting earnings before interest, taxes, depreciation and amortisation. Depreciation relates to items of property, plant and equipment and amortisation to intangible assets – both terms apply equally to non-current and current assets. The figure also includes impairment losses on equity investments accounted for under the equity method and on assets held for sale.

EBITDAplus refers to the operating result adjusted for non-cash items. It includes all cash-relevant items over which management has an influence.

Accounting method for measuring income derived from a company´s investments in associated companies and joint ventures. Under this method, investment income equals a share of net income proportional to the size of the equity investment.

Financial indicator expressing the ratio of shareholders´ equity to total assets.

Covenants are obligations on the part of a borrower towards its banks that are defined in loan agreements. They can also be described as conditions relating to the company´s capital structure. During the term of the loan they oblige the borrower to maintain certain financial ratios (relating to equity, debt or liquidity, for example). Deutsche Lufthansa AG´s main financial liabilities do not include covenants.

Financial indicator expressing the cash flow from operating activities remaining in the reporting period after deducting net cash used for investing activities.

Financial indicator expressing the ratio of net indebtedness plus pension provisions to equity.

Group of subsidiaries included in a company´s consolidated financial statements.

In air traffic a hub refers to an airline´s transfer airport, a central connecting point for different routes. Passengers and goods are transported from the original starting point to the airport´s hub. From there they are carried to their destination by a second flight alongside passengers and goods from other departure points.

International Air Transport Association the international trade association for the airline industry.

Losses recognised on the carrying amount of assets. Impairment charges are recognised when an asset´s "recoverable value" (the higher of fair value less costs to sell and value in use) is below its carrying amount. By contrast, depreciation or amortisation is the systematic allocation of the depreciable amount of an asset over its useful life.

Financial indicator expressing the degree to which capital expenditure was financed from the cash flow generated.

Price difference between crude oil and kerosene.

A fund to which Lufthansa has been contributing since 2004 to finance future retirement benefits to staff in Germany and those seconded abroad. Annual contributions are planned to build up fund assets, with the objective of funding benefit obligations in full.

Short for maintenance, repair and overhaul of aircraft.

Financial indicator denoting non-current borrowing less cash, cash equivalents and current securities.

In contrast to no-frills carriers these airlines offer a wide-ranging, normally global route network via one or more hubs, with synchronised connecting flights.

No-frills carriers are airlines which offer largely low ticket prices but with reduced service levels and sometimes additional charges on board and on the ground. Flights are mostly from secondary airports outside the major cities (e.g. Hahn in the Hunsrück area outside Frankfurt).

An earnings measure. The operating result is calculated as the profit from operating activities, adjusted for book gains and losses, write-backs of provisions, impairment losses, results of financial investments and the measurement of financial liabilities at the end of the period.

Standard output units for air transport. A revenue passenger-kilometre (RPK) denotes one fare-paying passenger transported one kilometre. A revenue tonne-kilometre (RTK) denotes one tonne of load (passengers and/or cargo) transported one kilometre.

Measure of capacity utilisation in per cent. The cargo load factor expresses the ratio of capacity sold to available capacity. The passenger load factor refers to passenger transportation and the cargo load factor to freight transport or total traffic.

A contract giving the option buyer the right to sell a specified amount of the underlying security within a specified period of time at an agreed price (strike price).

A standardised measure used on international financial markets to judge and categorise a company´s creditworthiness. A rating can enable conclusions to be drawn about whether an issuer is capable of meeting in full its obligations under the terms of the issue.

Registered shares that may only be transferred with the approval of the company.

Transfer of a company´s profit to equity. It strengthens the company´s financial position.

Financial indicator expressing the ratio of net profit to shareholders´ equity.

Financial indicator expressing the net profit before taxes in relation to sales revenue.

Financial indicator expressing the overall return that an investor earns from the increase in the market capitalisation or share price, plus the dividend payment. The total shareholder return is calculated from the share price at the close of the reporting year plus the dividend paid in respect of the previous year, multiplied by 100 and divided by the share price at the close of the previous year.

Revenue generated solely from flight operations. It comprises revenue from transporting passengers and cargo as well as related ancillary services.

Financial indicator for assessing a company´s liquidity, measured as the difference between its current assets and its current liabilities.